New charges likely in insider trading case against Rajat Gupta

NEW YORK: Rajat Gupta, former director of Goldman Sachs is likely to face " expanded charges" of insider trading even as his lawyers claimed that the US government allegations were merely "mumbo jumbo".

During a pretrial hearing in Federal District Court in Manhattan yesterday, the government said it is likely to bring slightly revised and expanded charges in a superseding indictment against Gupta by the end of January.

"A final decision has not been made, but more likely than not there will be a superseding indictment," Assistant US Attorney Richard Tarlowe told the judge during the hearing that lasted for over an hour and which Gupta attended.

Gupta, 63, who sat on the boards of Procter & Gamble and Goldman Sachs, is accused of divulging confidential details about those companies to his friend Raj Rajaratnam, the convicted former hedge fund manager now serving an 11-year jail term.

In the indictment filed last year, the government had said Gupta "provided inside information to Rajaratnam because of his friendship and business relationships with Rajaratnam.

"Gupta benefited and hoped to benefit from his friendship and business relationships with Rajaratnam in various ways, some of which were financial".

Calling the government's allegation in the indictment as "mumbo jumbo", Gupta's lawyer Gary Naftalis said his client had not made any profits through his dealings with Rajaratnam.

"We would like to know what allegations there is other than the vague mumbo jumbo here (in the indictment). What's their theory" Naftalis said.

"What were the financial benefits?... It's a simple question. Our client didn't trade, there was no profit-sharing agreement, there was no kick-back," he said.